The recent lockdowns and tight supply of components have made it a challenge for Pentamaster to develop business and deliver products and services in the near term. Pentamaster management has seen increasing activity in the electro optical (smartphone), auto and semi-conductor segments. The medical devices segment is expected to make a meaningful contribution only by early 2023 and to be a medium- and long-term growth driver for Pentamaster. We lowered our net profit forecasts by 4.1% in 2021F and 0.1% for 2022F after factoring in slower revenue growth. We maintain our ADD rating, with a target price of HK$2.82, based on 18x 2021F P/E (unchanged). The cut in target price is due mainly to lower net profit forecasts.
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